Time to rein in 'cowboy medicine'

Published 4:00 am, Friday, November 22, 2002

THE ONCE-mighty Tenet Healthcare Corp. is on the critical list. Multiple investigations, high-pressure "cowboy" tactics at its Redding hospital, and a nose-diving stock price have devastated the nation's No. 2 hospital chain.

The inquiries may sort out the damage, but this after-the-fact sleuthing isn't enough.

The country's health-care system -- so rich in technology and skill -- is open to gaming by canny operators. Tenet is the poster child for a larger group.

The company's greedy conduct plays out on several levels. Most dramatic is the conduct of two Redding doctors, who allegedly pressured scores of patients into costly heart operations at Tenet's hospital there. The astonishing number of procedures, which finally led to an FBI raid for records, earned the chain big money.

Tenet perfected a marketing strategy that made it a business-world darling. It shrewdly bought hospitals where it could play a dominant role and pushed up prices.

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In California, it owns 40 hospitals and controls 1 in 5 hospital beds in Orange and Los Angeles counties. With such market power, it raised rates higher and quicker than rivals. In Contra Costa County, where Tenet owns three of nine hospitals, its charges rose 123 percent between 1999 and 2000 compared to 13 percent at rival facilities.

It also nimbly worked the Medicare system for extra payments, totaling $750 million this year. The health-care world is full of pearly sounding management directives to "incentivize" and "control costs," but these notions became a joke with Tenet. Competition led to higher prices and more surgery under the firm's aggressive approach.

Another aspect is patient confidence. In Redding, heart patients flat on their back in hospital rooms were brow-beaten into heart surgery. The hospital became one of Tenet's cash cows, and the doctors were paid handsomely. What controls existed to make sure the operations were truly necessary? Why did so few physicians criticize their colleagues?

Many health-care experts accept Tenet's defense that it hasn't done anything illegal. The firm picked its markets, concentrated on lucrative surgeries, and milked Medicare for extra "outlier" payments. That may meet the law, but the results victimize both patients and taxpayers. It's time to demand tough reform.

As a first step, the separate inquiries into Tenet must go forward. The FBI,

state medical board, and Securities and Exchange Commission, among others, should do their duty and report their results.

But bolder action is needed to rein in the Tenets of the health world. In the semi-public health care system, where enormous state and federal programs are carried out by private operators, there must be sharp oversight of the public dime and the common good.

Patients must believe that they are receiving justifiable treatment and aren't being used as an excuse to churn the medical system. In Tenet's case, this watchfulness was missing.